Reducing Maintenance OPEX Costs

Duration - 3 days

Introduction

This practical 3-day maintenance cost management workshop will cover all aspects of cost management. When we conduct maintenance we spend money, therefore the maintenance function has to strive to reduce the level of maintenance that is carried out to reduce costs and at the same time meet business objectives.
The new ISO 55000 for Asset Management states that companies must develop defensible maintenance budgets and that assets must deliver value and decisions made must be traceable and auditable.
This workshop looks at different maintenance costs, how to develop maintenance budgets and how to report and reduce these costs, including a performance management system designed to meet the organisation's needs.
We will also cover financial decision making in maintenance in order to reduce whole life cycle costs. This includes when to replace ageing assets and to evaluate if life extension plans are cost effective

Key Benefits of Attending

Understand the ISO55000 requirements related to costs
Discuss what OPEX and CAPEX are and where money is spent and controlled
Understand life cycle costs and when to apply
How to apply different decision models
How to justify costs for improvement projects
Techniques to reduce the different costs elements
Understand how ageing assets are being managed

Contents

Topic 1 Common Cost Issues
Delegates' expectations and issues
15 issues that are commonly found in the process industries, each will influence the level of cost expended

Topic 2 Introduction to Reducing Costs
Why Tree approach to reducing costs
Outline of ISO55000 and the requirements for cost management
Costs management and the model of excellence
A model for cost control including activity based costing
Opportunities for cost reduction

Topic 3 Approach to Maintenance Budgeting
Definition of a budget
Cost categories, costs centres, cost elements
OPEX and CAPEX
Short term and long term forecasting
Approaches to budget forecasting and building a defensible budget
Using the CMMS for cost control

Topic 4 Life Cycle Costing
The LCC costing concepts and when to use
Different end of life drivers
The key drivers and the process
Estimating potential benefits
Application to a bad actor and to evaluate the different options

Topic 5 Time Value of Money (Past, Present and Future Costs)
Explanation of terms and discounting formula
When to use discounting techniques , a review of 5 practical scenarios

Topic 6 Justifying Projects (Financial Appraising)
Financial metrics for evaluating projects (discounted and non discounted models)
Simple payback, payback with varying benefits
Determining equivalent annual cost
Project prioritisation
Exercises

Topic 7 Developing Decision Models
Overview of different decision models
Examples of cash flow models, e.g. Replace like for like, Replace with a superior unit
Exercises

Topic 8 Reducing Failure Costs
Guiding principles
Effect of maintenance strategy
Effect of poor quality maintenance
Reliability improvement process
Identifying opportunities
Reliability techniques for events and bad actors
Techniques for improved reliability
Case study improving pump reliability from 10 to 45 months over a 3.5 year period

Topic 9 Reducing Downtime & Repair Costs
Maintainability goals
Analysis of total downtime and repair time
Sequence of events approach
Task analysis & streamlining
Video F1 pit stop

Topic 10 Reducing Costs through PM Optimisation
Different maintenance life's (safe, cost effective and MTBF)
Using statistical plotting paper to gain an understanding of the various reliability charts
PM Optimisation to determine unit cost per unit time
Demonstration that MTBF is of no value in selecting task frequencies
Case study where PM was recommended to be ineffective

Topic 11 Reducing Spares Costs
Explanation of terms and different spares costs
Formulas used to manage spares
Identifying opportunities & tactics to reduce costs
What is the ABC in our CMMS and when do we use it?
Dealing with high value, long lead time items

Topic 12 Reducing Labour Costs
Determining standard labour costs
Productivity audits
Wrench time studies
Tactics to reduce costs

Topic 13 RAM Modelling
Overview of RAM Modelling
Modelling different design configurations including mothballing
Obtaining life cycle costs

Topic 14 Reducing Turnaround and Shutdown Costs
Prerequisite of an effective shutdown
Estimating man-hours and costs
Identifying critical and sub critical activities

Topic 15 Reducing Energy Costs
Target and Monitoring
Exercise CUSUM
Motor energy costs

Topic 16 Cost Performance Management System
An introduction to the principles of a performance management system
Key Performance Indicators
Agreeing targets for achievement, taking action
Report formats including dashboards

Workshop Review and Delegates' Actions Plans

Training Methodology

PowerPoint slides. Delegates will learn by active participation during the workshop and through the use of exercises, case studies
We will use MS Excel, & Reliasoft's Weibull 9 and highlight BlockSim a systems analysis tool both softwares can be downloaded for evaluation prior to the workshop see www.reliasoft.com

Who Should Attend

Managers, Engineers, Supervisors who budget and control costs and anyone who carries out maintenance as they are spending money.